Emergency services are still unable to confirm if anyone was inside a Dunedin house that burnt to the ground this morning.
Fire and Emergency were called to the fire in a derelict, two-storey house in Philips St in Kensington at about 6.45am.
A Fenz spokesperson said the fire was contained by 8.30am, with firefighters working to dampen any hotspots this afternoon.
Six fire appliances and a command unit fought the blaze, along with 28 firefighters.
So far there had been no reports of any injuries, but FENZ and police were investigating whether anyone was inside at the time the fire started.
It was a former boarding house, sometimes used by homeless people for shelter.
Incident controller Pete Douglas said crews with breathing apparatus were working through the interior of the house and also a neighbouring property, to make sure the fire was fully extinguished.
The fire had spread to two neighbouring houses - one had minor external damage while the other was more extensively damaged.
Swift work from firefighters meant the occupants of neighbouring houses were safely evacuated and their homes saved from burning down, he said.
Fire investigators remain at the scene on Friday afternoon, where a police drone is being used as part of the investigation.
Dunedin Bedding Bank founder Janine Walker said she knew of at least two people who had used the building for shelter, but she did not know if they had been there overnight.
"It was a boarding house but now it's derelict and the homeless just use it to sleep in at night when they are cold," Walker said.
"I hope if anyone was in there they did get out safely. It's not a good thing to think about really."
While the cause of the fire has not yet been determined, Walker was concerned it could have been lit to keep the homeless people warm.
Temperatures in Dunedin overnight fell as low as 2.8 degrees, according to MetService.
Walker knew of another homeless woman who slept rough in bushes close to the house, so she went to Philips St this morning to check on her, but was unable to get through the cordon.
"We went and drove around the normal spots where she hangs out and she wasn't there, so we are guessing she is still there.
"As soon as the cordons are lifted, we are going to go straight down there and check on her."
Walker said she worked with about 30 homeless people on a weekly basis, but there were many more living in the area.
The Dunedin Bedding Bank helps people in need with sleeping bags, tents and other essentials, while trying to find alternative housing for them.
Walker said Dunedin City Council and other organisations needed to work together to find a place where the homeless could seek refuge, instead of being forced to squat in derelict buildings or on the streets.
Dunedin City Council said it hoped Fire and Emergency NZ were able to confirm that nobody was in the building at the time of the fire.
The building was not required to have a Building Warrant of Fitness and council's building services staff were not aware homeless people may have been using it, a spokesperson for the council said.
They confirmed the building was formerly a boarding house and was in the process of being demolished before this morning's fire.
The council said it was working with other agencies to address the complex issue of homelessness and develop a city-wide approach in Dunedin as part of our Housing Action Plan.
Meanwhile, Dunedin police sergeant Aaron Burgess said several roads in the area remained closed while the investigation was underway, with members of the public asked to avoid the area.
South Rd between Eglinton Rd and Princes St remains closed.
Meanwhile, King Edward St is also closed near the intersection with Wilkie Road, after a truck hit power lines just before 6.30am.
FENZ confirmed the two incidents were unrelated.
Police said motorists should avoid the Kensington area.